Sweden looking to introduce its own crypto currency

[shalab]

 

https://cryptovest.com/news/sweden-looking-to-release-national-digital-currency-called-e-krona/

 

 

[compounding]

"The choice of technology needs to be investigated

 

Which technology would work best for an e-krona is a matter for further investigation by the project. Both new and tried-and-tested technology could be used, and there could be cooperation with both public authorities and private actors."

 

The Riksbank doesn't seem decided on using cryptography as the underlying technology, as far as I can tell.

[SharperDingaan]

"The choice of technology needs to be investigated

 

Which technology would work best for an e-krona is a matter for further investigation by the project. Both new and tried-and-tested technology could be used, and there could be cooperation with both public authorities and private actors."

 

The Riksbank doesn't seem decided on using cryptography as the underlying technology, as far as I can tell.

 

Welcome to the CBDC - the real question is whether e-Krona will also have interest bearing possibilities (I-CBDC). We would suggest that the hangups are how interest on the token would affect the payments and banking system, how taxation on the token interest earned by non Swedes will be processed, and whether the token can be issued with interest switched 'off'. ie; At a rate of 0% but with staged integration.

 

It isn't choice of technology, it's can it be integrated with what already exists - and how.

 

SD

 

[John Hjorth]

Why is this Swedish phenomen in its early innings even a cryptocurrency? Isen't it just digital notes backed by Riksbanken, thereby giving Swedish persons access to a current account with Riksbanken? - a right so far only given to Swedish financial institutions [banks etc.]? - So in a way Riksbanken goes into competition with banks etc. about payments? [implying: one svenska krona always equals one e-krona]

[compounding]

"The choice of technology needs to be investigated

 

Which technology would work best for an e-krona is a matter for further investigation by the project. Both new and tried-and-tested technology could be used, and there could be cooperation with both public authorities and private actors."

 

The Riksbank doesn't seem decided on using cryptography as the underlying technology, as far as I can tell.

 

Welcome to the CBDC - the real question is whether e-Krona will also have interest bearing possibilities (I-CBDC). We would suggest that the hangups are how interest on the token would affect the payments and banking system, how taxation on the token interest earned by non Swedes will be processed, and whether the token can be issued with interest switched 'off'. ie; At a rate of 0% but with staged integration.

 

It isn't choice of technology, it's can it be integrated with what already exists - and how.

 

SD

 

I don't have the slightest idea as to what the CBDC is, or whether it is something to be desired to be welcomed to or not, but hey thanks anyway.

 

I also haven't argued that the choice of technology is the most significant question, so take it easy with your straw manning. I objected to the fact that Sweden is looking to specifically introduce a cryptocurrency, which is the title of this thread, and also the title in the linked article.

 

 

[John Hjorth]

Here we go, Johan,

 

Bank of Canada Staff Discussion Paper: Central Bank Digital Currency: Motivations and Implications.

 

[Earlier linked to by SharperDingaan.]

[SharperDingaan]

Why is this Swedish phenomen in its early innings even a cryptocurrency? Isen't it just digital notes backed by Riksbanken, thereby giving Swedish persons access to a current account with Riksbanken? - a right so far only given to Swedish financial institutions [banks etc.]? - So in a way Riksbanken goes into competition with banks etc. about payments? [implying: one svenska krona always equals one e-krona]

 

Assuming e-Krone is a CBDC.....

Every Swede or Swedish entity gets a digital wallet at the Riksbanken to hold their E-Krone. Same as every Swedish FI.

Every Swede or Swedish entity will have a normal bank account from which they get cash.

Cash and e-Krone freely exchange at 1:1, guaranteed by the Riksbanken.

 

But .....

 

The Riksbanken ALSO provides a smart-contract writer recording transactions on a blockchain. Any Swede or Swedish entity can now transact with any other Swede or Swedish entity, in e-Krone, at zero cost. The state can now directly credit your Riksbanken wallet with benefit & pension payments, and you can directly pay your taxes and municipal fees from your Riksbanken wallet. No more credit or debit card charges, Riksbanken ability to trace a good chunk of all transactions in the Swedish economy (AML/ATF enhancements), and a significant reduction in transaction and fraud costs throughout the economy.

 

Should the Riksbanken pay out a daily annualized 1% interest on all e-Krone that did not transact that day, every Swedish bank would now have to pay more than that to attract and retain a customer deposit; that will be lent out multiple times as interest bearing loans. The Riksbanken can now control the MINIMUM interest rate in Sweden (it sets it), the velocity of e-Krone (pay more interest & it slows), and the amount of lending (change the fractional reserve requirement). Very powerful, and largely NEW, monetary tools.

 

The more corrupt or underground your economy (Russia, Israel) the better this works.

The smaller your economy (Sweeden) the easier it is to implement.

 

If you think this is great, there is very little not to love.

If you're concerned about 'big brother' you would buy Bitcoin to store your wealth - but there will be a Riksbanken digital trace to your coin exchange buy/sell (even if you used an ATM). As other CB's do the same thing the underground 'space' contracts. concentrates into fewer and fewer portals - and becomes more 'containable'.

 

Welcome to ONE of the 'new' worlds of banking.

 

SD

 

 

 

 

 

 

 

[John Hjorth]

Thanks for setting this thing in perspective here, SharperDingaan.